Basics Of Banking In India: Check Meaning, Terms, Fundamentals, Types, And Accounts For Interview

Basics Of Banking In India: A Bank is a licensed financial institution that accepts deposits from the public people and advances loans. In most countries, banks are regulated by the national government or the Central Bank. Banks provide countless functions like deposits, withdrawals, currency exchange, forex trading, and wealth management. Banks act as a link between depositors and borrowers. Banks use the cash deposited by the customers to give credit facilities to needy people who want to borrow.

Banks vary in different sizes from small, community based institutions to global commercial banks. Banks make a profit by charging interest rates on loans. This profit is earned by charging a higher interest rate than the interest rate they pay to customer deposits. These interest rates must agree with the regulations set by the national government or the Central bank.

Click the below link to download the Basics of Banking In India PDF.

Basics Of Banking In India PDF Download

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In this article, we have explained Banking Fundamentals, basic banking knowledge, basic banking terms, basic banking services, basics of banking for interview,  basics of banking in India, basic banking questions and answers pdf, basics of banking pdf, basics of banking operation, basics of banking functions of banks, basics of banking in India, and basics of banking interview questions. 

Banking History in India PDF Download

Banking Fundamentals

In India, Banks are classified into various types which have their own advantages and disadvantages in their activities. Each bank has a specific set of audiences. Some bank works in both rural and urban sectors while some focus mainly on the rural sector. The majority of the banks provide services in big cities and major towns. Bank plays a major role in the banking industry and an important function in the economy. The bank directs the needs of trade, industry, and farm funds. A country's growth mainly depends on the development of banking. Many sectors do deposit mobilization and credit disbursement through banks. Mobilizing resources and allocating them efficiently banks play an important role in the poor countries.

About Regional Rural Banks in India - Complete List

Types of Bank Accounts

The basics of Banking also include types of bank accounts and their features. The various types of bank accounts are as follows,

      • Savings Account

      • Current Account

      • Recurring Deposit Account

      • Fixed Deposit Account

      • Salary Account

      • DEMAT Account

      • NRI Account

To know the complete details of types of bank accounts click the link provided below.

Details of Types of Bank Accounts in India

Types of Banks and their Functions

When it comes to the basics of banking, the types of banks and their functions play a major part. Here we have provided the complete details of the types of banks and their functions. Candidates can check the given information for their preparation for upcoming competitive examinations. 

Click the below link to learn the types of banks and their functions and roles.

Check the Types of Bank, Functions in India

Payments Bank is one of the Types of Banks in India. Here we have provided the link to know the Payments Bank in India in detail. 

Payment Banks in India - Eligibility, List, and their Headquarters 

Internet Banking / E-Banking

Internet banking is an electronic payment system where the customer of the bank, businesses, or other financial institutions conducts transactions through the website in online mode. Internet banking is also known as e-banking, online banking, or virtual banking. Internet Banking involves the customers to access their bank accounts through an electronic medium.

E-banking involves various advantages and disadvantages. The main advantage is that customers need not visit the bank branch often as the transaction is done online. With the availability of the Internet, digital banking services are easy for customers. E-banking is developing faster among bankers and customers as it involves hassle free services. Internet banking involves less human error as certain details are only entered by humans. The customers need not have to visit the bank branch for every transaction. This saves more time and money for the customers. E-banking breaks the geographical barrier for money transactions.

The disadvantages include disruption in technology, lack of personal security concerns, etc. 

Types of E-banking Services

Let us discuss the forms of e-banking and their services.

      • ATM (Automated Teller Machine)

      • Electronic Clearing Service

      • Smart Cards

      • Debit Cards

      • Mobile Banking

      • Internet Banking

      • Tele Banking

      • Door-step Banking

Basic Banking Terminologies and Abbreviations

The basics of banking include certain banking terminologies and their abbreviations. Here we have provided some of the banking terminologies and their abbreviations in detail.

  1. ACF - Account Credit Facility

  2. AD - Authorised Dealer

  3. ADB - Asian Development Bank

  4. ADR - American Depository Receipt

  5. AFS - Annual Financial Statement

  6. AIRCSC - All India Rural Credit Survey Committee

  7. ALM - Asset Liability Management

  8. ASSOCHAM - Associated Chambers of Commerce and Industry of India

  9. ATM - Automated Teller Machine

  10. BG - Bank Guarantee

  11. BIS - Bank for International Settlements

  12. BoP - Balance of Payments

  13. BSCS - Basel Committee of Banking Supervision

  14. BSR - Basic Statistical Returns

  15. CAD - Capital Account Deficit

  16. CAG - Controller and Auditor General of India

  17. CASA - Current Account Savings Account

  18. CBS - Core Banking Solution

  19. CC - Cash Credit

  20. CD - Certificate of Deposit

  21. CR Ratio - Credit Deposit Ratio

  22. CF - Company Finance

  23. CFRA - Combined Finance and Revenue Accounts

  24. CGRA - Currency and Gold Revaluation Account

  25. CGTMSE - Credit Guarantee Fund Trust for Micro and Small Enterprises

  26. CIBIL - Credit Information Bureau (India) Limited

  27. CII - Confederation of Indian Industry

  28. CO - Capital Outlay

  29. CP - Commercial Paper

  30. CPI - Consumer Price Index

  31. CR - Capital Receipts

  32. CRAR - Capital to Risk-Weighted Asset Ratio

  33. CRR - Cash Reserve Ratio

  34. CVC - Central Vigilance Commission

  35. DBOD - Department of Banking Operations and Development

  36. DCB - Demand Collection and Balance

  37. DCCB - District Central Co-operative Bank

  38. DCM, RBI - Department of Currency Management, RBI

  39. DD - Demand Draft

  40. DEIO - Department of External Investments and Operations

  41. DGCI&S - Directorate General of Commercial Intelligence and Statistics

  42. DI - Direct Investments

  43. DICGC - Deposit Insurance and Credit Guarantee Corporation of India

  44. DID - Discharge of Internal Debt

  45. DMA - Departmentalized Ministries Account

  46. DRI - Differential Rate of Interest Scheme

  47. DSBB - Dissemination Standards Bulletin Board

  48. DVP - Delivery Versus Payment

  49. ECB - External Commercial Borrowing

  50. ECB - European Central Bank

  51. ECGC - Export Credit and Guarantee Corporation

  52. ECS - Electronic Clearing Service

  53. EDMU - External Debt Management Unit

  54. EEA - Exchange Equalization Account

  55. EEC - European Economic Community

  56. EEFC - Exchange Earners Foreign Currency

  57. EFR - Exchange Fluctuation Reserve

  58. EMI - Equated Monthly Installments

  59. EXIM Bank - Export Import Bank of India

  60. FCA - Foreign Currency Assets

  61. FCCB - Foreign Currency Convertible Bond

  62. FCNRB(B) - Foreign Currency Non- resident (Banks)

  63. FCNRA - Foreign Currency Non Resident Account

  64. FCNRD - Foreign Currency Non Repatriable Deposit

  65. FDI - Foreign Direct Investment

  66. FEMA - Foreign Exchange Management Act

  67. FI - Financial Institution

  68. FICCI - Federation of Indian Chambers of Commerce and Industry

  69. FII - Foreign Institutional Investor

  70. FIMMDA - Fixed Income Money Market and Derivatives Association of India

  71. FISIM - Financial Intermediation Services Indirectly Measured

  72. FLAS - Foreign Liabilities and Assets Survey

  73. FOF - Flow of Funds

  74. FPI - Foreign Portfolio Investment

  75. FRA - Forward Rate Agreement

  76. FRN - Floating Rate Note

  77. GDP - Gross Domestic Product

  78. GDR - Global Depository Receipt

  79. G-Sec - Government Securities

  80. IBRD - International Bank for Reconstruction and Development

  81. IDRBT - Institute for Development and Research in Banking Technology

  82. IEPF - Investors Education and Protection Fund

  83. IFSC - Indian Financial System Code

  84. IFC - Indian Financial Corporation

  85. IFCI - Industrial Finance Corporation of India

  86. IIBF - International Institute of Banking and Finance

  87. IIBI - Industrial Investment Bank of India

  88. IFC - International Finance Corporation

  89. IFR - Investment Fluctuation Reserve

  90. IIP - Index of Industrial Production

  91. IMF - International Monetary Fund

  92. IMPS - Immediate Payment Service

  93. IP - Interest Payment

  94. IRAC - Income Recognition Asset Classification

  95. ISDA - International Swaps and Derivative Association

  96. ISO - International Standards Organisation

  97. KYC - Know Your Customer

  98. KVP - Kisan Vikas Patra

  99. KVIC - Khadi and Village Industries Corporation

  100. LAF - Liquidity Adjustment Facility

  101. LAS - Loans and Advances by States

  102. LC - Letter of Credit

  103. LDB - Land Development Bank

  104. LERMS - Liberalised Exchange Rate Management System

  105. LFAR - Long Form Audit Report

  106. M1 - Narrow Money

  107. M3 - Broad Money

  108. MA - Moving Average

  109. MCA - Ministry of Corporate Affairs

  110. MIGA - Multilateral Investment Guarantee Agency

  111. MOC - Memorandum of Changes

  112. MSS - Market Stabilisation Scheme

  113. MUDRA - Micro Units Development & Refinance Agency Ltd

  114. NABARD - National Bank for Agriculture and Rural Development

  115. NBFC - Non Banking Financial Companies

  116. NEC - Not Elsewhere Classified

  117. NECS - National Electronic Clearing Service

  118. NEER - Nominal Effective Exchange Rate

  119. NEFT - National Electronic Fund Transfer

  120. NFA - Non Foreign Exchange Assets

  121. NFD - Net Fiscal Deficit

  122. NHB - National Housing Bank

  123. NIF - Note Issuance Facility

  124. NPA - Non Performing Assets

  125. NPV - Net Present Value

  126. NSSF - National Small Savings Fund

  127. OD - Overdraft

  128. OECD - Organisation for Economic Cooperation and Development

  129. OLTAS - Online Tax Accounting System

  130. PACS - Primary Agricultural Credit Societies

  131. PD - Primary Deficit

  132. PLR - Prime Lending Rate

  133. RD - Revenue Deficit

  134. RE - Revenue Expenditure

  135. REER - Real Effective Exchange Rate

  136. RIB - Resurgent India Bonds

  137. RLA - Recoveries of Loans and Advancements

  138. RTC - Repayment of Loans to Centre

  139. RoC’s - Registrars of Companies

  140. RR - Revenue Receipts

  141. RRB - Regional Rural Bank

  142. RTGS - Real Time Gross Settlement

  143. RTP - Reserve Tranche Position

  144. RUF - Revolving Underwriting Facility

  145. RWA - Risk Weighted Asset

  146. SCARDB - State Co-operative Agriculture and Rural Development Bank

  147. SCB - State Co-operative Bank

  148. SCB - Scheduled Commerical Bank

  149. SDDS - Special Data Dissemination Standards

  150. SDR - Special Drawing Right

  151. SEBI - Securities Exchange Board of India

  152. SFC - State Financial Corporation

  153. SIDBI - Small Industries Development Bank of India

  154. SIDC - State Industrial Development Corporation

  155. SLR - Statutory Liquidity Ratio

  156. SMG - Standing Monitoring Group

  157. SNA - System of National Accounts

  158. SWIFT - Society for Worldwide Interbank Financial Telecommunications

  159. TB’s - Treasury Bills

  160. TC - Temporary Change

  161. TT - Telegraphic Transfer

  162. UCN - Uniform Code Number

  163. UPI - Unified Payments Interface

  164. UTI - Unit Trust of India

  165. UTR number - Unique Transaction Service number

  166. WPI - Wholesale Price Index

  167. YTM - Yield to Maturity

Basics of Banking: FAQs

Q. What are the basic banking services?

A. The basic banking services include accepting deposits, granting loans, payment and remittance services, overdraft, currency exchange, locker, money transfer, etc.

Q. What is the full form of ATM?

A. Automated Teller Machine is the full form of ATM.

Q. What is the full form of PLR?

A. Prime Lending Rate is the full form of PLR.

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